In Eastern Europe, through our network of local contacts (excluding Russia, but including Ukraine and Turkey), AXA Private Equity intends to identify businesses that will benefit from the superior mid-to long-term growth potential of the CEE region, driven by domestic demand or export opportunities, or where the expertise and contacts of AXA Private Equity can add value in terms of opening up new opportunities or improving the operational performance of the company. We will also seek to identify companies with good growth prospects hampered in their expansion by capital constraints.

Approach

• LBO Small Cap
  We take mostly controlling interests in small and midcap companies valued at between €50m to €300m. We then launch a major drive to add value and boost growth in these companies, advised by our local staff in Vienna and their local networks in all the countries of the region.
  
• Expansion Capital
  Investment via minority interests, protected by shareholders agreements and strong exit rights etc., in mature and profitable companies. To a limited extent, we may also invest in listed companies on secondary markets.
  
• Priorities set in terms of countries and industries, determined on the basis of careful analysis and local knowledge to take into account the heterogeneous nature of the region in terms of business, legal and regulatory environment, growth prospects and sensitivity to macroeconomic risks.

Criteria

• Target company market leader on its domestic market or having real potential to be leader.
• Highly skilled management team.
• Strong desire for co-investment by local management to incentivize them in the results and liquidity objectives of the equity funds we advise.
• Ability to invest between €15m and €25m per transaction (with potential for up to €45m).
• No sector preference excluding real estate, financial services and so-called sensitive sectors not covered by AXA Private Equity pursuant to our Socially Responsible Investor commitments such as defence, tobacco etc.
• Clearly defined objective for the fund to exit within an average period of 5 years, established in agreement with the local management and other shareholders.
  

Geographical sectors

• Bosnia Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia, Turkey and Ukraine.